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Abstract Introduction Over the past four decades, the Indonesian health care system has greatly expanded and the health of Indonesian people has improved although the rich-poor gap in health status and service access remains an issue. The government has been trying to address these gaps and intensify efforts to improve the health of the poor following the economic crisis in 1998. Methods This paper examines trends and levels in socio-economic inequity of health and identifies critical factors constraining efforts to improve the health of the poor. Quantitative data were taken from the Indonesian Demographic Health Surveys and the National Socio-Economic Surveys, and qualitative data were obtained from interviews with individuals and groups representing relevant stakeholders. Results The health of the population has improved as indicated by child mortality decline and the increase in community access to health services. However, the continuing prevalence of malnourished children and the persisting socio-economic inequity of health suggest that efforts to improve the health of the poor have not yet been effective. Factors identified at institution and policy levels that have constrained improvements in health care access and outcomes for the poor include: the high cost of electing formal governance leaders; confused leadership roles in the health sector; lack of health inequity indicators; the generally weak capacity in the health care system, especially in planning and budgeting; and the leakage and limited coverage of programs for the poor. Conclusions Despite the government's efforts to improve the health of the poor, the rich-poor gap in health status and service access continues. Factors at institutional and policy levels are critical in contributing to the lack of efficiency and effectiveness for health programs that address the poor.